Situation

In order to encourage the use of the environmentally “friendlier” bio-fuel in diesel engines, the US government issued a subsidy for blenders of biodiesel in 2008.  These subsidies expired in 2009 only to be re-implemented in late 2010.  For the large fuel distribution companies, this offered increased profitability to those who marketed pre-blended biodiesel. The same advantage is available to smaller retailers and gas stations that wish to blend on site and receive both a federal and state subsidy for this product.

Case Evaluation – A Citgo retail fueling station in suburban Chicago

During 2006, a mechanical contractor requested that Semler Industries become involved with a retail fueling station located in Suburban Chicago.  The owner of the station had agreed to include a biodiesel blending pump onsite to gain the benefit of the subsidy.  This required a capital investment, but the long-term payback appeared attractive.  The system took a few months to design, build and install. It required little to no attention in service or repair.  Depending on the market price for petroleum diesel fuel and B100 bio-diesel, payback on the system is typically one year, if three trucks fill up per day.  Higher volume retailers would realize a quicker return on investment and  financial benefit to the organization.

Equipment Description

The design was intended to blend biodiesel with standard,  (number 2) diesel fuel at a pre-set, proportion determined by the customer.  Typical blends are set at 10% (B10 biodiesel) and the system can be adjusted to provide from 0% to approximately 20% biodiesel.  Biodiesel is a temperature-sensitive fluid that can cloud or gel at low temperatures, as commonly experienced in the northern regions of the United States.  A provision to provide heat to the B100 is included in the blending system in colder territories where it is necessary to ensure a proper and well-blended solution.   Controls and systems were designed  to prevent the biodiesel from reaching the critical low-temperature point, and safety shut-downs provisions are in place to prevent a vehicle from being fueled with improperly blended or “gelled” fuel.  The equipment was also designed to be installed underground, in order to protect the system from exposure to surface temperatures.  The unit ties into the fueling station’s inventory control system, pump, and dispenser interlock station and has system functionality indicators located in the convenience store mechanical / electrical room.

There are no, known competitive units with heat and all the other important monitoring and instrumentation provisions on the market today for use in the retail environment.   The controls are fairly complicated due to the need to tie in the dispensing pumps, biodiesel blending station and main panel while watching temperatures, flow rates and pressures.  The flow rate is required to be 20gpm for availability to the dispensing pumps.  The system can be controlled at 20% blend ratio, while 11% is the usual ratio.  A specially designed pump was developed in collaboration with the manufacturer of the proportioning pumps.

The pump system has been installed and used for 4 years, with no significant failures or “down-time”.  The only scheduled maintenance is a filter change.  When maintained properly, and correctly protected with the filtration equipment included with the system, the equipment should perform accurately and reliably for several years.

Recommendations

Semler Industries has focused on “new” facility builds to incorporate the equipment from the outset.  However, if suitable space and equipment is available, it would be possible to work with the mechanical contractor to install such a system at an existing facility in order to gain from the current tax benefits.

References

1. Joe Palm’s personal files.